By Rail Or Snail: Mixed Reports On Payments Progress

Fed calls for task force to study creating new, faster payments rails, while Fiserv survey finds mobile adoption accelerating on the fast track.


Two notable new reports about the payments rails made news in recent days, one about the train and the other about the passengers.

The former is the Fed’s long-awaited “Strategies For Improving The U.S. Payments System.” The latter is Fiserv’s seventh-annual Household Billing Survey.

The speed of payments in America’s financial services infrastructure has long been a source of concern. Another major stakeholder, NACHA, just released its own call to action, seeking proposals on implementing same-day ACH functionality.

The Fed report, meanwhile, calls for industry participants to get together on creating a new system, first by creating a taskforce. NACHA calls the Fed report a blueprint for change, but some call it more of the same.

We’ll get into this more in the year to come, but for now here’s an excellent rundown on the Fed move, or lack of movement, from It’s titled “The Fed’s Slow March To Maybe Faster Payments.”

The Fiserv biller survey, meanwhile, speaks on action actually underway for that leg of the payments journey between end user and financial institution.

The report is noteworthy for Fiserv’s oversize presence in credit union technology and the report’s own research cred. A third-party firm conducted it in May among 3,021 participants at least 21 years of age and representative of the U.S. population of online households. (Instead of among 25 executives who stopped at a trade show booth to fill out a questionnaire and enter the iPad raffle.)

The Fiserv biller report has become kind of an annual barometer for financial services providers and those of us who write about them. This year’s big takeaway: “Consumers are coming to expect multiple billing and payment options from billers of all types and sizes.”

Especially via mobile. The number of mobile bill payers grew 69% since the 2013 study, Fiserv says, and smartphone bill payers average two transactions a month that way.

Sixty percent of the respondents say being able to pay with a mobile device increases satisfaction with a biller (and by extrapolation, your credit union), and 75% say multiple options for making same-day payments also would strengthen their bond with said biller, bank, or credit union.

“With today’s abundance of options to pay and receive bills, consumers increasingly value choice — and choice leads to increased customer satisfaction,” says a Fiserv blog on the report.

By Rail Or Snail

“What this survey tells me is that mobile is quickly replacing PCs as a banking tool of choice, with paper a distant third place,” says David Gibbard, a former core processor executive who’s now an Atlanta-based digital banking consultant and blogger.

He sees that trend only accelerating as members upgrade from small-screen smartphones to the larger-screen phablets now entering the market.

Gibbard adds that to keep up, tech-savvy credit unions will need to better serve tech-savvy members.

“Members need a smart application that learns and manages their cash flow, spending and income that can automatically make payments based on predictive analysis and tends,” he told

Steve Bugg, meanwhile, says the Fiserv report reaffirmed his belief that credit unions need to serve bill payers any way they choose to pay. He’s the chief marketing and member service officer at Heritage Federal Credit Union ($463M, Newburgh, IN) and says the number of bill pay users in his shop rose 38.4% from March to December after an online banking re-launch.

He also says more than 2,000 payments a month are now made through the credit union’s bill pay app. “Our results have significantly outpaced our projections, another strong indicator that bill payment options are extremely important to our members,” Bugg says.

And like Fiserv’s report, Bugg says it’s all about choices. For instance, he says Heritage has promoted Visa cards as an option for members who want to use that credit line to pay their bills.

Meanwhile, a new pay-by-phone option for members resulted in more than 640 payments for more than $300,000 in December. And other members still send bills in by mail or drop checks in the night deposit slots at the Indiana credit union’s branches.

“As technology continues to expand and mobile payments become the accepted norm we need to continue to strategically focus on payment choices,” Bugg says. “But we can’t forget to continue to market all our solutions and options, whether they’re traditional or emerging.”


Jan. 29, 2015


  • This research is not surprising. I used to think that Bill Payers were divided into two categories: Organizers: these payers are more likely to use bank bill pay services or PFM services such as Quicken or Quickbooks. They want everything neat and tidy in one place, along with reports and other detailed information. This represents @20% of payers. Transactors: these payers like to use the payee website or account to account transfers rather than a bill pay tool. Some just want to “git ‘er done” quickly with a minimum of effort and lag time in payment float. Some pay all their bills using a single credit card to rack up loyalty rewards, etc. Some use P2P services. They’re not interested in spending time to set up bill pay through their bank or credit union. They don’t need reports or other details. This represents 80% of payers. I still believe these two categories exist, but now there is a hybrid somewhere in the middle- put there by the penetration of smart devices in the marketplace. Not sure what to call them- maybe “on-the-go”- but I’m one of them. I have Bill Pay set up in my online services, but also make payments directly through my mobile device. I like the choice. Here’s what we’re doing at TDECU to support this category of payers: • Bill Pay is available through our apps for iOS and Android devices (user still has to set up Bill Pay in Online Banking, but they can do that on their phone if they like). We introduced this feature in 2014. • eBills are available through the service • members can set up payment (and other) alerts through the service • members can set up and make P2P payments through the service • members can pay their TDECU consumer loans at our public website (although they have to register the first time around, they do not have to enroll in OLB or Bill Pay to use). • We are exploring other payment services such as Apple Pay to expand available payment choices down the road
    paul o'malley, TDECU